When Leftists Were Free Traders

In Pax Economica, historian Marc-William Palen chronicles the left-wing history of free trade.

Pax Economica: Left-Wing Visions of a Free Trade World, by Marc-William Palen, Princeton University Press, 328 pages, $35

In 1845 the editor of the New York Evening Post, William Cullen Bryant, traveled to England. In America, Bryant's paper was famous for its radical support of free trade, free banking, international peace, and the abolition of slavery. In Europe, he was America's most famous and accomplished poet—and a strong ally to Richard Cobden in the Anti–Corn Law League's war to bring down the price of bread by rolling back tariffs.

The movement against the Corn Laws was reaching a fever pitch: a tipping point toward free trade and peace in the world's premier empire, with repercussions that could ripple around the globe. The next year, Prime Minister Robert Peel buckled under the pressure and Parliament repealed the hated trade barriers. Free traders gained their greatest victory to date, Britons got their cheap bread, and—with the globalizing power of the telegraph at hand—radical liberals felt like they were poised to sweep humanity into a new age of peace and prosperity.

Meanwhile, a counterrevolution was brewing. One of America's overlooked contributions to intellectual history and world history is the nationalist-protectionist economic system developed by Friedrich List and popularly called "the American System." Listian economics became the Whig Party platform, calling for public works, a national bank, and high protective tariffs. The Listian nationalists argued that the United States should pursue economic independence to maintain its security against the British juggernaut. Many others who were arrayed against British power copied the Americans.

Here we have the central set of intellectual and political conflicts that set the stage for Marc-William Palen's timely and important new volume, Pax Economica: Left-Wing Visions of a Free Trade World. This book fluidly combines intellectual, social, political, and world history, seamlessly transitioning across borders to show how ideas and interests intersect and collide.

Though the story has many elements, its heart is a movement "for free trade, anti-imperialism, and peace." This broad movement's members included early libertarians, Georgist land taxers, Marxists, feminists, Christian radicals, and others. "Left-leaning liberal radical reformers such as Richard Cobden, Henry George, Mark Twain, Leo Tolstoy, Norman Angell, Abe Isoo, J.A. Hobson, Jane Addams, Rosika Schwimmer, and Fanny Garrison Villard," Palen writes, "connected free trade with democracy promotion, antislavery, universal suffrage, civil rights, prosperity, anti-imperialism, and peace." They were, he says, a "motley crew of left-wing free traders" who spearheaded an early, good-natured version of globalism.

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The phrases left-wing and free traders are not often conjoined today. "The past couple of decades have witnessed a flurry of scholarship tracing the right-wing origins of today's free-market ideas back to the interwar years," Palen notes. "By recovering the shared world of left-wing radicalism and free trade, this book tells a very different story, with a much earlier starting point: the 1840s." This, he hopes, will overcome the errors created when "Cold War lenses…blurred the historical depiction of modern left-wing radicalism, displacing the economic peace movement from its previously prominent position."

The 19th century left thought free trade would promote peace: the more interdependence, the more peaceful cooperation and understanding. In a speech to the Anti–Corn Law League on January 15, 1846, Cobden claimed that material prosperity was the least of free trade's implications, painting a world in which all mankind melted into one vast family: "I see in the Free-trade principle that which shall act on the moral world as the principle of gravitation in the universe," he said, "drawing men together, thrusting aside the antagonism of race, and creed, and language, and uniting us in the bonds of eternal peace."

The rogue's gallery of Victorian-era free traders included some odd bedfellows. There were Marxists, who, in Palen's words, "did not consider free trade free of sin" but believed that it would accelerate the social revolution. There were feminists who broke with the movement's anti-imperial side, "hoping that doing so would legitimate the women's suffrage movement in the eyes of male political elites," yet still vigorously supported free trade. There was the founder of the Esperanto movement, who hoped his creation would "eradicate one of the greatest impediments to world trade—the language barrier."

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The 1840s were the era of what Palen calls the "Cosmopolitical imagination," but the decade also kicked off a multidecade surge of nationalist economics around the globe in response. From Russia to Japan to Germany to Australia—and, much later, in India and Africa—nationalist-protectionists viewed Britain's Cobdenite turn as another way to prevent local independence and maintain the empire. They sought a way out from under British (later American) political domination through national autarky, the Listian economic counterpart to political independence. This was a constant thorn in the side of the Cobdenite anti-imperialists.

In Germany, the Listians formed the German historical school, whose "leading lights created the Verein für Sozialpolitik (Association for social policy) in 1872 to counteract Manchester liberalism, Judaism, internationalism, anti-imperialism, and democratic socialism," while ushering in "a new wave of anti-Semitism." Back in the United States, the German historical school's disciples founded the University of Pennsylvania's Wharton School; the GOP adopted a program of high tariffs and strict immigration quotas. In Soviet Russia, Vladimir Lenin drew on List's ideas—and "laid the groundwork for Joseph Stalin, whose industrial-military system was more Listian than Marxist." Where once there appeared nothing but free trade on the horizon, we were now thrown on the defensive while the nations of the world marched to war.

Cobden died in 1865, but the movement he led continued to grow through the long battles with nationalism and imperialism that form the narrative of this book. After the disaster of two world wars, figures like the "Tennessee Cobden"—Franklin Roosevelt's secretary of state, Cordell Hull—thought they saw their moment resurfacing.Hull was a lifelong Cobdenite and a bit of a throwback to the long history of low tariffs in the Democratic Party. As secretary of state he spearheaded the "good neighbor" policy of moving from militarism toward trade in U.S. relations with Latin America. Hull eventually became a powerful supporter of supranational institutions, such as the United Nations and the General Agreement on Tariffs and Trade, that he hoped would connect people through trade and flourishing rather than armed conquest and imperialism. As he and others pushed such ideas during and immediately after World War II, each of the pro-trade factions this book covers saw reason for hope once again.

But the feeling was again fleeting, and it ultimately fell to Cold War pressures. Ideological divisions over the welfare state, Third World development, labor policy, and "democracy promotion" split the old "left-wing commercial peace movement," Palen writes, as "neoliberals like [F.A.] Hayek of the Geneva School and the Chicago School's Milton Friedman were deeply critical of the welfare state, anti-colonial nationalism, and trade unions." Some neoliberals defended Augusto Pinochet's dictatorship in Chile and the South African apartheid regime, exacerbating those divisions. It now seemed to left-wingers that the new liberals were simply capitalist bodyguards for the new colonialists—the hegemonic West, especially the United States—and the new mercantilists who would use the West's power to force less-developed nations into perpetual subservience.

Neoliberals like Hayek recognized and appreciated the historical linkages between Manchesterites and socialists. But those historic linkages steadily diverged, particularly as neoliberalism came to be identified with Margaret Thatcher's Tory government in Britain and Ronald Reagan's Republican administration in the United States. All this, Palen argues, "effectively ostracized free trade's left-wing supporters from the very supranational institutions and structures they had helped create." Most free traders on the right could feel successful and willing to maintain the course; the left was, well, left to sit and stew in defeat. So were the more libertarian-leaning free traders who would not support conservative militarism or alliances with the "New Christian Right" in exchange for trade liberalization. Some libertarians were also suspicious of the new supranational organizations and agreements, fearing the ways they could evolve into supranational bureaucracies.

Pax Economica ends on a somber note. Ours is an age of resurgent nationalist economics, militarism, and technocracy. Peaceful internationalism and interdependence are threatened. In the United States, Palen writes, we are saddled with "a new protectionist Washington Consensus," and trade policy around the world is merging with foreign policy. He concludes with a call for recovery and memory: to challenge the "growing economic nationalist partnership between the far Left and the far Right" by recovering the "radical economic cosmopolitan tradition" that stretched across the spectrum while fighting for both free trade and peace.